Mr. Simon de Jong (Regina-Qu'Appelle, NDP)
Madam Speaker, my intervention will not be 40 minutes but I wish to put a few things on the record.
It is of course always a concern for New Democrats, particularly a New Democrat from Saskatchewan, to make certain that the books are balanced. I know many people have accused the New Democratic Party of being the party of tax and spend and running up high deficits. However, the background and history of the leadership of both the CCF and New Democratic governments in Saskatchewan has shown that historically we want to maintain a balanced budget.
The Regina manifesto put it so well: "No CCF government will run its public finances to help feed the parasitic interest receiving classes".
Having said that, it is worth noting that the attempts by the present Liberal government to balance its books have basically been done on the backs of working Canadians, the poor, the elderly, the young and the sick.
As the previous speaker from the Reform Party so aptly put it, most of the money saved by this government has been because of the cutbacks to the Canadian health and social transfer payments. Huge sums of money that should have gone to the provinces to help pay for medicare, post-secondary education and the increased number of people on social assistance rolls because of the lack of job opportunities, are the people who are paying for the deficit reduction of this government.
As well, major hunks of surpluses of the employment insurance fund are going to general revenues to help further reduce the deficit. Yet let us not forget that it is not the poor and not the unemployed and it is not our social programs that have created the debt in the first place. A Statistics Canada study in the early nineties determined that 50 per cent of the debt was due to high interest payments. Some 44 per cent of it was due to loss of revenues. Only 6 per cent was due to increases in government expenditures of which I believe only 4 per cent was due to increases in government expenditures on social programs.
It was not the increase in social programs that created the debt in the first place. It was the reaction to the runaway inflation of the seventies that created the high interest payments going to 18, 19, 20 some per cent that catapulted the deficits into huge debts. Then it was the loss of jobs, plus the tax loopholes that mainly the Liberal government introduced in the 1970s that created a loss of revenue which in turn also accounted for 44 per cent of the debt.
Only 6 per cent of the debt is because of increases in government programs and only 4 per cent of that is due to increases in social expenditures. Yet who are the people who paid for the reduction of the deficit? It mainly comes on the backs of working people, the young, the sick, the unemployed and the poor.
A few years back Jesse Jackson in the United States coined a phrase that "it wasn't us poor people who sat and indulged ourselves at the banquets but we're the ones who are stuck with the bill". That is as true for people in Canada as it is in the United States.
The wild government expenditures of the 1970s that created runaway inflation, that saw the horrendous growth of assets, stocks, bonds and real estate, both in Canada and in the United States, those are the people who benefited. Yet they are not the ones who are paying for it. Their effective tax rates have actually declined while the taxes for working and middle class Canadians, even for poor pensioners, have increased while their benefits have decreased.
This system is wrong. It is morally wrong. It is economically wrong. It is a bankrupt system that does not bode well for the economic health and well-being of our country. The mismanagement and the wrong economic policies of this government and the previous Tory government have led us to a position where we have this huge mountain of debt that will take I do not know how many generations to pay off.
One of the items also included as a tax item in this bill that we are debating, Bill C-92, is a change that resulted from the Supreme Court decision on what is called the Thibaudeau case. It was determined that rather than having the higher income earner paying child support and family support payments being able to deduct those payments from his or her income tax, it should be the recipient of the payment who actually had to pay for those costs.
At the time it was recognized that this would mean less money to families for child care and that it would mean an increase in government revenues. In fact the budget papers for 1996 suggested that as a result of the Thibaudeau court case the government will get a windfall of $120 million in the third year in increased tax revenues and more in subsequent years.
That is $120 million extra which is being taken away from families. In most cases the male makes child support payments. They cannot deduct those payments from their income tax. The low income earner is not able to deduct child care expenses and the government is ending up with more money.
While we support it in principle, it is of concern to us that $120 million is being taken away from families. That money should be going to support children.
I would like to place the position of the New Democratic Party on the record today. We would want this section of Bill C-92 to be reviewed on a yearly basis to determine what impact it is having on child care and the families raising children.
Our concern is the impact this will have on children, particularly those children living below the poverty line. We are concerned that in the end it will mean some $120 million being taken away from the needs of those children. On behalf of the New Democratic Party I would like to put on record our concern and our wish that this section be reviewed on a yearly basis.
The tax system is essential for a government to raise the revenues it needs to do the things which government should be doing and as well to effect a redistribution of wealth in the country. Our position has always been that such a system must be fair and equal to all Canadians. That is why we initially supported the suggestions and reports which recommended that a dollar earned, whether from profits, commissions, dividends, increases in capital gains or by the sweat of one's brow, should all be taxed equally, as the Carter commission proposed. We have never come close to achieving that ideal. What Carter said was that a dollar is a dollar and that the tax on that dollar should be equal.
Corporations should be paying their fair share. We have seen during Liberal and Conservative regimes more tax loopholes being given to the rich and the powerful. While small and medium size businesses are struggling to keep their heads above water, creating jobs for Canadians, the very large transcontinental corporations are able to get by without paying any or very few taxes.
It is a crime that one family should be able to move $1 billion offshore and not pay a cent on the capital gains earned on that money. It is a shame that would be allowed when poor pensioners earning a little over $1,000 a month have to pay tax.
The tax system is unfair. That creates cynicism and encourages average Canadians to cheat. The average Canadian will say "why should I pay this amount of money when the rich and the powerful, those who have the connections to the Minister of Finance and the Department of Finance, are able to get special rules and omissions so they do not have to pay their fair share of the taxes?"
This unfairness must be corrected. We will continue to fight for a fair and equal tax system so that all Canadians will be taxed fairly and equally.
I find it interesting that Bill C-92 should be debated in what is presumed to be the end of this Parliament with an election being called soon.
Taxation is what Bill C-92 is all about; who has the power, how it gets exercised, who benefits from the power. As long as there are political parties in power that are financed by the banks, international traders and the wheeler and the dealers, by the mighty, the powerful and the wealthy, there will never be true democracy, true equality and a true and just society. It will be the poor and the working people who will pay the price for deficit reductions, as we have seen under both the Liberal and Tory governments. It will be the poor and ordinary working middle class Canadians who will pay the price.
The struggle will go on and in the coming election we will make certain this becomes a major issue.
Topic: Government Orders
Subtopic: Income Tax Budget Amendments Act, 1996